In order to determine the strategy that will work effectively after buying your business, there are five essential questions that will help you determine if you will able to implement and push you to prosperity and solidify customer loyalty.
As a business owner, you cannot expect to answer these questions quickly, nor are the answers black and white. Evaluate the strategy that you want to follow with these five questions at least twice a year – even if the answers haven’t changed significantly. In this day and age, things change as you progress with your business between products, customers, personnel and as a business owner yourself. If you have these questions continuously going on in the back of your mind, you will be able to make the difficult decisions that are imperative if you want to not only continue with your business but thrive.
These questions will solidify with you after you buy a business by basing your decision making on sound strategic thinking that is about direction not tactics.
What Type of Business Do You Run?
Believe it or not, many businesses that people start and buy are in more than just one category; offering a variety of products and/or services without knowing it. Others have a single focus or a few well-conceived products or services. It’s important to understand the business that you buy, the competition and the most innovative practices in your industry. What is the big picture that molds your business?
What Other Businesses Do You Have?
Many business owners don’t view their business through a wide enough lens. They fail to capitalize on other business opportunities that they can obtain from simply a change in thinking. Trucking companies, for example, are in the transportation business, banks are in the transaction management business, football teams are in the entertainment business and Mercedes, if they profit more from their automotive financing products, are also a financial services business as well as an automotive retail and parts/services one.
What Are Your Core Competencies?
This will give you an incredible competitive advantage. Competencies are not mere strengths as every business has them. However, only a very few strengths are true competencies that are going to give you an advantage over the competition, market differentiators that separate you from others. But core competencies are often very subtle: a billion-dollar computer connector manufacturer business too much of its skyrocketing growth from an unnoticed core competency – the ability to acquire businesses and hold onto their key employees and customers. Acquisition and integration were their core competencies.
What Are Your Core Values?
Isolating and identifying core values are crucial for your business. If your core value is short-term profitability, you need to organize your business appropriately. If you value long-term relationships with customers, this requires a different strategy such as with a compensation package and organization chart. Southwest Airlines has a people-oriented culture, so they hire for hospitality skills and humor.
Are Your Short-Term Goals and Long-Term Strategies Aligned?
Public businesses tend to think from quarter to quarter in order to please financial analysts and stockholders. The pressures of the next quarter too often conflict with the opportunities of the next few years. Businesses need to align short-term results with long-term profitability, short-term profits with long-term customer satisfaction.